Car Insurance for Young Drivers – The Complete Guide
No matter how careful a driver you are, accidents happen. In 2019, 38,800 Americans died in car accidents. Young adults aged 21 to 24 had the highest fatality rate per 100,000 population.
Car insurance for young drivers is nice to have in case of accidents. Take some time to check if you have the best insurance coverage for your car. Every state requires drivers to acquire at least a minimum amount of insurance coverage in case of a mishap while on the road. Young drivers pay more for insurance because they lack driving experience.
If you are one of these young adults driving for a transportation network company (TNC) like Uber or Lyft, your standard personal car insurance might not cover expenses for a mishap while you are on the road. Without ridesharing insurance, you have to shoulder the expenses for a car accident during your tour of duty, like vehicle repairs and the hospital bills of an injured passenger.
What is TNC’s Commercial Insurance?
While on the job, Uber and Lyft are liable only for the live coverage of the commercial policy. There are four stages in the commercial coverage, each offering a different liability in every stage of the ride.
| STAGE | UBER | LYFT |
| 1 | Your personal auto insurance | Your personal auto insurance |
| 2 | Liability
50k/25k/100k Body injury/Property/Total |
Liability
50k/25k/100k Body injury/Property/Total |
| 3 and 4 | Liability
$1 million Uninsured/Underinsured Motorist Collision and Comprehensive $1k deductible |
Liability
$1 million Uninsured/Underinsured Motorist Collision and Comprehensive $2.5k deductible |
Stage 1
The driver just finished a trip app is off prior to securing a new ride request. In case of an accident, your personal auto insurance might not be enough to cover the damage to your vehicle and the injury to your riders. The major TNCs will not cover any expenses from the accident.
Stage 2
The app is on and the driver is waiting for a ride assignment. Lyft and Uber insurance cover bodily injury for $50,000 per person, property damage of $25,000 per accident. and up to $100,000 personal injury per accident.
Stage 3
The driver accepts a rider’s request and is on the way to pick up the passenger. The major TNCs have commercial liability coverage of up to $1 million per incident.
Stage 4
Uber insurance will cover up to $1 million in damages and injuries expenses if the passenger is in the vehicle and the vehicle met an accident.
If something untoward happens while you are waiting for a passenger request, you are less covered than during a trip. To ensure that you are adequately protected, consider additional rideshare insurance coverage from another company.
Types of Rideshare Insurance
Insurance companies have designed insurance policies specifically for rideshare drivers.
Additional Protection
Insurance providers offer a gap coverage for added protection that is not offered by the commercial insurance of TNCs.
Personal Insurance Coverage Extension
Rideshare drivers can extend their personal insurance coverage into particular phases of the ride. This coverage is included in the personal insurance policy of the driver with the same insurance company.
Hybrid Insurance Package
This will replace personal auto insurance with a rideshare insurance plan.
The Top Rideshare Insurance Companies
The offers of car insurance for young drivers by insurance carriers vary. Some rideshare policies are similar to your personal auto insurance plan; others offer this as an add-on to your existing personal auto insurance policy; while some providers present this as a TNC extension to your present personal auto insurance.
Here is a list of the best rideshare insurance companies.
USAA
Coverage Type: Personal Insurance Coverage Extension
This insurance costs $6 per month added to your current personal auto insurance plan with USAA. The coverage starts the moment you are logged on to the ridesharing app and waiting for a rider’s request. USAA is available only to current military service members, veterans, and their families.
American Family
Coverage Type: Personal Insurance Coverage Extension
The cost depends on where you live and your car insurance policy premium with American Family. The coverage is only for the available stage of the ridesharing trip, the commercial insurance plan of TNCs covers the rest of the ride.
GEICO
Coverage Type: Hybrid Insurance Package
The cost of $25 per month is added to the personal auto insurance premium. The coverage includes all stages of the trip. It covers the name of the driver on the policy, persons in your home, passengers, and property damage if you have collision and comprehensive insurance and the vehicle is yours.
Allstate
Coverage Type: Additional Protection or Hybrid Commercial Insurance Package
An additional monthly premium between $10 to $20 is added to the personal auto insurance with Allstate. In 2020, Allstate collaborated with Uber to grant commercial insurance to young drivers and passengers in Alaska, Idaho, Illinois, Michigan, Minnesota, Montana, Nevada, New Jersey, New Mexico, New York, Oregon, Utah, Washington, Wisconsin, and Wyoming.
Erie
Coverage Type: Personal Insurance Coverage Extension
Erie has extended its personal insurance coverage to include rideshare services offering Lyft and Uber insurance to drivers. The insurance policy covers an additional $9 to $15 per month to the existing auto insurance premium with Erie. All stages of the ridesharing trip are covered by the insurance policy.
Safeco
Coverage Type: Personal Insurance Coverage Extension
Around $10 per month is added to your existing auto personal insurance with Safeco. Only the vehicle under the contract is covered and it does not replace your personal auto insurance policy. The coverage is only for the available stage of the trip.
State Farm
Coverage Type: Personal Insurance Coverage Extension
The estimated cost is 15 to 20 percent of your existing premium with State Farm. The liability covers only the available stage and does not include the en route or on-trip stages. Check with a Lyft or Uber insurance plan if limits during the non-inclusion stages can cover liabilities with passengers in case of an accident. If it does not, adjust your coverages and limits for personal auto policy.
Farmers
Coverage Type: Personal Insurance Coverage Extension or Hybrid Commercial Insurance Package
Farmers partnered with Uber in 2020 for a full rideshare insurance policy joining all personal and business coverage into a single plan to drivers in Delaware, Georgia, Hawaii, Indiana, Iowa, Kansas, Maryland, Missouri, Nebraska, North Dakota, Pennsylvania, South Dakota, Virginia, Washington D.C., and West Virginia.
